Home loans for lawyers and legal professionals in Sydney
If you work in law, your income often does not arrive the way a lender's assessment form expects. Lenders read salary, partnership distributions, performance bonuses, trust income, and billings differently, and the lender that suits a salaried solicitor is rarely the one that suits an equity partner. We work with more than 60 lenders from our Double Bay office, and the key is identifying which of them may consider legal income in the form it actually arrives.
How lenders read legal income
The question is almost never whether you earn enough. It is whether the lender's policy recognises the form your income takes.
How lenders read legal income
The question is almost never whether you earn enough. It is whether the lender's policy recognises the form your income takes.
The year your position changes
Moving from employee to partner is the year your income looks least like a payslip. The same is true in your first year at the bar, or the year you move from a firm to in-house. Lenders often want a longer history exactly when you have the shortest, so timing a purchase around that change is worth discussing before you start looking, not after you have made an offer.
Professional lending policies
Some lenders apply specific policies to certain professional groups, which can include concessions on lenders mortgage insurance. These concessions are strictly subject to each lender’s own eligibility criteria. Those criteria commonly include minimum income thresholds, maximum loan-to-value ratios, approved profession and registration categories, and the purpose of the loan. They are not offered by all lenders, they are not available to all legal professionals, and the policies change without notice. We will tell you what is available to you at the time, rather than what was available last year.
Working with your accountant
Most of our legal clients already have an accountant, and it generally works better when we talk early rather than at settlement. Decisions about tax, ownership structures and investment strategy belong with your accountant and your financial adviser. Our part is the finance: what a lender will accept, how it needs to be evidenced, and what each option means for the loan.
Work we have done
These are illustrative examples of individual client situations. The lender assesses every application on its own merits, and the outcome depends entirely on your circumstances. Nothing below is an indication of a result you would receive.
Talk to a broker who works with legal professionals
Tell us how your income is structured and what you are looking at, and we can talk you through how lenders may assess it, before you make an offer. The initial consultation is free of charge. If your loan proceeds and settles, we are usually paid a commission by the lender. In some cases a fee may be payable by you, and where that applies we will tell you and put it in writing before you proceed. How we are paid is set out in full in our credit guide.
Do lenders treat partnership income differently from salary?
Yes. Salary is verified from payslips. Partnership income is usually verified from partnership financial statements and personal tax returns, and lenders differ on how they treat drawings against your share of profit. Most want two years of history, though some will consider less.
I have just been made partner. Should I wait before buying?
Not necessarily, but it changes how you prepare. In the year you move from salary to partnership, you have the least history in the form lenders want. Some lenders will work from the partnership agreement and a letter confirming the arrangement. It is a good idea to have that conversation before you start looking rather than after you have made an offer.
How is a bonus assessed?
Most lenders want two years of bonus history and will use an average or a discounted figure rather than the full amount. A first-year bonus often counts for nothing. Policy varies, so the same bonus can change your borrowing capacity depending on where the application goes.
I am a barrister. What do lenders ask for?
Usually two years of tax returns and financial statements, because fee income is self-employed income. If you have a short or unusual year, a written explanation attached to the application does more than you would expect.
Do lawyers get lenders mortgage insurance waivers?
Some lenders apply specific policies to certain professional groups, which can include concessions on lenders mortgage insurance. They are strictly subject to each lender’s eligibility criteria, which commonly include minimum income thresholds and maximum loan-to-value ratios, and they are not available to all legal professionals or from all lenders. We can tell you what is available at the time you apply.